pauleys - tell 'em they're dreamin - wednesday, page-73

Hi Red

Actually the volume change hasn't made that much difference to what I still see as weakness coming into the market today. Instead of a no demand bar on low volume we have an upthrust bar within a downtrend which have a lot more clout than in an uptrend. That can be seen by the fact that we closed below the midpoint of the bar. Another thing that bothers me is that we gapped up. I look on gaps as potential deliberate moves by the smart money to get over resistance levels without having to absorb a lot of supply. This encourages exuberant behavior which can be sold into easily and we may have seen some of that occurring today in what is still a very uncertain market, with a lot of people just hanging to buy the bottom. On the plus side we made higher highs lows and closes and the spread didn't narrow too much, that would have been a worry, but it would have been better and more bullish to have seen the spread widen. We are very close to resistance at 4584 so if we could get up above that tomorrow on higher volume wider spread that would be good. I'm not convinced we've seen the bottom yet and won't be until i see the previous lows tested successfully and we get a higher low in place and break out of that downtrend channel.

Interesting day tomorrow I think. Great report as always too Red, you are so on the money.

Cheers!